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Vermont's Health Reform Saga -- The Plot Thickens: Part Three

Vermont's Health Reform Saga -- The Plot Thickens: Part Three

June 12, 2005

Back in early April, it looked like Vermont was moving toward a single payer/tax financed health scheme as the House passed legislation mandating such a system (though leaving tax levels and benefit design to be determined later). The Senate balked and passed a bill creating a new payroll tax on employers who don't cover their workers.

Both branches have now agreed on a plan, and the Senate prevailed -- a payroll tax (1% on the first $50K of payroll, and 3% over that) and a new 1% income tax on individuals without health insurance would be used to create a primary/preventive care program for individuals without health insurance. I use the word "would" because Republican Governor Douglas is planning to veto the bill this week leaving its fate up in the air. Gov. Douglas proposes instead a 3% tax on insurance premiums to fund a similar program, albeit with less money.

For a summary of where things stand, click here for Burlington Free Press' latest article.

Early lessons from this? First, single payer -- as much as many of us prefer it -- is simply a tough sell. House Dems said a Commission would determine the level of taxation needed to replace private premiums. Gov. Douglas said his calculations put the new tax at 20%. After that, their plan was a "dead man walking." Second, looks like a payroll tax on employers who don't cover their workers has some political viability -- a core element of the Health Access and Affordability Act promoted by HCFA and the ACT! Coalition. Third, for us junkies, this stuff if never dull.